Question

How long will it take $20,000 to grow to $24,000 if the investment earns interest at the rate of 6%/year compounded monthly

Answer 1

It will take 37 months to reach the $24,000 objective.

Step-by-step explanation:

i= 0.06/12= 0.005

To determine the time required for $20,000 to reach $24,000 at a rate of 0.05%, we need to use the following formula:

n= ln(FV/PV) / ln(1+i)

n= ln(24,000/20,000) / ln(1.005)

n= 36.55 = 37

It will take 37 months to reach the $24,000 objective.